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by Mike Magee in Palm Springs

But Otellini did not go into great detail, reserving real benchmarks for the official release of the Pentium III tomorrow.

Otellini gave three different examples of software packages showing speed boosts. Naturally Speaking, a speech recognition application, showed a 37 per cent performance boost, Photoshop delivered 64 per cent better performance and Netshow Encoder is 20 per cent faster using the Pentium III, he claimed.

He said that while Dataquest predicted double digit growth in the microprocessor market over the next couple of years, Intel had still not found the magic formula to sell as many products as it wished.

He said that in the US and Western Europe, 25 per cent of the market was represented by sub $1000 PCs. "The sweet spot currently is $1,900," he said.

"We have not yet found the recipe to generate significant growth," he said. "Across all segments repeat buyers in the US represent 80 per cent of sales this year."

He said that Intel wanted to bring new users into the industry: "A lot of the buying has been cannibalistic," he said.

Otellini said that while desktop products currently represent 80 per cent of end user sales and notebooks 20 per cent, by the end of 2000 Intel intended to invert those figures.

In the server market, Intel architecture is now dominating the market, claimed Otellini. Intel will also push price performance, with other vendors not keeping up on either metric, despite recent trends.

The server market is being driven by Web sales and Intel will focus on application tuning, and different form factors.

"What's next for Intel will be the IA-64 architecture. We need to get the applications to be ready when the chip comes out," he said.